My mom called this morning at 7:30am. She should be at work. My mom is a 62 year old waitress in a family restaurant in my hometown. She's been at this restaurant since I was 4. Yep, 34 years. Clearly, this is a career for her.

So, this morning she calls me. She used the cell phone I got her and that I pay for so she can call me anytime she wants. Only, she's never called me from work before.

Mom's workday begins at 5:30am every morning when she opens the restaurant. The restaurant has been broken into several times over the last year now, something previously unheard of at this establishment. This morning, at 7:30, mom had been on the job for 2 hours and hadn't had a single customer. No railroad guys having coffee. No teachers before school. No parents picking up a to-go order. Nothing. 2 Waitress and no work. The place was empty. That's when I saw a report on MSNBC about folks with good paying stable jobs cutting back.

The frugality of the Kimberlins and Scanlons and millions of other Americans who still have their good jobs feed back on the economy, holding down growth and encouraging other worried workers to trim their spending — causing the whole vicious cycle to run another lap.

"It really can become and does become a self-fulfilling prophecy," Denise Kimberlin said.

We're all connected. My mom the waitress, depends on the money she earns in tips from those who have stable employment to make it through a recession. But if the railroaders, teachers and UPS drivers aren't coming in to the restaurant to grab a cup of Joe, she's going to find herself, and many more women like her, standing in an empty restaurant.

So, if you're employed and not going through a tough financial crisis, remember to eat out once in a while, and also, TIP YOUR WAITRESS WELL. It could be my mom you're tipping.

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Damn Straight:

To recap: We're in the midst of a global financial crisis. The housing bubble has burst and prices have collapsed. The economy has been in recession for a year. Unemployment has risen to 6.7 percent, and if "marginally attached" workers are included -- those who have given up even looking for jobs -- along with those who want to work full time but are forced to accept fewer hours, the rate is 12.5 percent.


Even if the Big Three deserve to die, they shouldn't die now. Economic theory notwithstanding, it would be insanity to throw hundreds of thousands of auto company employees, and maybe a few million others in the supply and sales chains, out of work -- leaving them and their families at the mercy of an economy that has no replacement jobs for them. Public funds would end up supporting these people anyway, except that we would have lost our domestic auto industry -- which, despite its many failings, is the only domestic auto industry we've got.

What the auto companies need is something on the order of $14 billion to survive until the Obama administration takes office and is able to address the crisis in a more systematic way. That sounds like a lot of money, but it's a rounding error in the context of the ongoing financial meltdown. We've already agreed to spend up to $700 billion to bail out Wall Street.

And dude, I've been saying this for the last several weeks...where was the Senate Outrage on the Republican side of Wall Street Salaries, CEO salaries or Dealership sweetheart deals? There was none. Corker even took off the table one of the biggest pieces of the pie, dealerships. Not that I'd want to see service department staff and mechanics to go unemployed, but if the line worker's on the table for a compromis, so the fuck is the dealership, CEO pay and all those salaries on Wall Street and in the Banking industry, and more from Eugene Robinson's piece in the post:

Funny, I don't recall a cry from Senate Republicans for salary caps on the stockbrokers whose jobs were saved in the Wall Street bailout. Nor, to my knowledge, have they demanded that white-collar workers in the auto companies take pay cuts. I do recall lectures from some Republicans in the Senate about how inadvisable it is for government to meddle in the workings of the free market. In my book, renegotiating labor contracts qualifies as meddling.

Yeah, what he said.

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Mostly, watch and listen at 4:11.



The UAW worker speaking is from American Axle and the staffers at the table have never heard of American Axle. NEVER HEARD OF IT. Why is that important? An 11 week strike this past winter.

How can we expect the Republican Senators to be able to pull their heads out of their asses if their staffers can't even keep up on an 11 week strike that SHUT DOWN GM plants all over the country, in Mexico and also hit Canadian autoworkers? Are these rely the people who should be making policy about how and if money should be loaned to manufacturing in this country?

Idiots and asshats. Because of them, there's no money out there in the form of a LOAN for the auto industry!!

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I got this in an e-mail but had to go and read it for myself mostly because at the same time I got this, someone else sent me a link to what states receive the most in Federal aide and those states that utilize the least. And not surprisingly, Republican Senators who receive the most in federal funding are also the senators who voted against a BRIDGE LOAN for Chrysler and GM. Oh and of course the Republicans from Alaska, too (receiving loads, but clearly want to screw Michigan and the rest of the midwest).



Take what Mitt Romney said on Meet the Press this morning, blaming a $2k "disadvantage" on labor, labor benefits and labor legacy (retired workers). Governor Granholm hit the nail on the head when she made sure that everyone knew that this "disadvantage" is about how other countries provide for their citizens. Here, we have companies that must, as in the Detroit Free Press editorial

December 12, 2008

Hey, Southerners: Detroit 3 helped you to survive

BY TOM WALSH
FREE PRESS COLUMNIST

When Hurricane Katrina slammed into Louisiana and Alabama on Aug. 29, 2005, the automobile companies of Detroit did not harrumph that the gulf coast should have been better prepared.

They didn't sit back and wait for New Orleans to submit a detailed plan for future repair of the ruptured levees.

General Motors Corp., on Aug. 30, donated $400,000 to the American Red Cross 2005 Hurricane Relief Fund, pledged to match up to $250,000 more in employee contributions, and sent more than 150 vehicles to the stricken area for use in relief work.

Ford Motor Co. and the UAW quickly made a joint donation of $100,000 to the Red Cross. The Chrysler Group gave $150,000 to the Red Cross and $200,000 to local New Orleans charities. DaimlerChrysler Services chipped in $200,000 for the Red Cross and pledged to match employee donations up to $50,000.

The three Detroit auto companies together gave more than $18 million in cash and vehicles to the Katrina relief effort in the ensuing months. No strings attached.

The U.S. Senate's most adamant naysayers about whether Detroit deserves rescue loans should have thought about that before now. It might have made Thursday's futile wrangling over a compromise to get $14 billion in emergency rescue loans for GM and Chrysler a bit less tortuous.

U.S. Sen. David Vitter, R-La., for one, might have dialed down his earlier rhetoric.

Vitter said Wednesday that he plans to vote against the rescue because, in his words, it is "ass-backwards" to give money to the distressed companies before Congress sees more detailed survival plans.

Sen. Richard Shelby, R-Ala., should think about Hurricane Katrina, too. He has threatened a filibuster against the bill, calling it "a bridge loan to nowhere" and stating that Detroit's automakers should undergo a fundamental restructuring before they ask Congress for money.

None of the logical arguments made by, or on behalf of, Detroit's auto industry seem to resonate with certain congressional critics.

Not the fact that GM, Ford and Chrysler have slashed billions of dollars in costs. Not the fact that they have the nation's top-selling pickups and minivans. Not the fact that they have lots of high-mileage vehicles and more on the way. Not the fact an auto company bankruptcy would have a horrible ripple effect, wiping out scores of suppliers and making hundreds of thousands more U.S. workers jobless.

No, to the most adamant auto-rescue opponents in the Senate, Detroit doesn't make cars people want. It's a dinosaur not worth preserving.

Could the opinions of these senators be colored by the fact that the foreign-owned plants of Toyota, Honda, Hyundai, Kia, BMW, Nissan and Volkswagen -- which compete with the Detroit Three -- are located in their states?

Nah, let's not even go there.

Let's just say that since logic hasn't worked, we should fall back on a simple moral argument.

If you see a fellow American is drowning, gasping for air, do you quiz him for a while about whether he's drunk or why he never learned to swim better? Or do you throw him a life buoy and ask questions later?

That, it seems to me, is where we are with America's car companies.

You have done nothing and failed them, senators.

So now it's up to President George W. Bush and Treasury Secretary Hank Paulson to, hopefully, rush in with emergency aid from the $700-billion Troubled Assets Relief Program.

They could still hold the Detroit Three's feet to the fire afterward, empowering a strong auto czar to bring all stakeholders together to forge business models for these companies that can withstand future shocks.

Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com.

Just one more time, Damn, Mitt Romney is an ass...ah, and a liar. Wow, glad he's not going to be president. Why are there always more Republicans on the Sunday talks than Democrats? Come on, the CEO of Wal-Mart? Please, focused on working people? Yeah, working them for as little as possible with the smallest wages as possible and then, with little or no benefits. Great model to compare to GM and Chrysler. Why would this joker even be on Meet the Press? Is this what we really want to expand as a model for growth or prosperity?

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The video comes to us by way of the Dailybeast who gets it from MSNBC last week.

What I find interesting, is that Citi, AIG and others didn't really have to present any plans for their bailouts and AIG continues to pay out bonuses and has extravagant trips even after they get a bailout.

So, I'm a little confused how a company like Citi can say they went a little too far in lending and that got them into trouble, but the Auto Industry can't say hey, there's a serious market down turn caused by the mess from the financial sector and we need help. Hell, you can even hear what Citi thinks caused their mess, again, from the Dailybeast:



The current financial mess this country is in comes in part from lending to borrowers who couldn't pay, popular know by underwriters as Liar Loans. These are loans with no required documentation. So, we have a freeze in the credit markets, it's harder to get loans for houses and cars and this hurts companies like Citi (companies that actually helped cause the problems) and they get a bailout, but the Auto-Industry can't even get a loan? Somehow, I think this has more to do with Union-Bashing than anything and the comments from President-Elect Obama are very disappointing to me. Very, very disappointing.

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I've been struggling with what to say about the incestuous bias in the media against the UAW through the media's repetition of Right Wing lies, distortions and avarice. Problem is that I didn't really know how to sum it up. To boil it down to what I really wanted to say or maybe it was how I wanted to say it.

Until today.

I was over at Dailykos and noticed a comment in a diary on the Bridge loan to automakers:

The lazy, overpaid autoworker stereotype is outdated and tiresome. Just like any other industry, we have our share of slackers, but the overwhelming majority of our workforce "bring it" every day.

You say the UAW needs to accept concessions to help solve this crisis. Apparently you haven't been paying attention for the last 20 years or so. The companies have been asking for and receiving concessions for the last several contracts. The most recent contract allows for a nearly 50% lower wage for the next generation of workers, while also removing health care costs from the company books.

Apparently that's not enough. You want to see us all out of work.

The bottom line is that while the UAW and management have played a part in the past mistakes, both have been working to ensure a solid future for the industry for years.

Over that same time the government has done nothing to help regarding affordable health care, balanced trade and tax incentives that reward companies for keeping jobs here instead of outsourcing. The middle class (led by the unions) tried to sound the alarm years ago. Unfortunately, nobody listened because of their anti-union prejudices.

The comment comes from a 29 year veteran of an assembly line, a UAW member, in the Detroit Free Press.

There is so much anti-union blather out there in the ether that it’s hard to cut threw it and make sense of anything sometimes. Here, on Uniongal, we try to do that. We try to find a way to remind each reader that there is something bigger than the ether, than the anti-union comments you read or the blatant anti-worker bias in the media. There’s something so much bigger out there, it’s solidarity.

This weekend, I read a similar thread on .UnionReview and commented:

We do fight back. Everyday you remember that there are brothers and sisters in your union, you beat folks like National Review. Everytime you talk to some random person about what it means to be in a union, what it means to have brothers and sisters in the stuggle are always victories against these jack asses.
Solidarity means that we come together and everytime we do, they are afraid and when they are afraid, they will take a brush and with broad strokes, they will paint us with the actions they themselves take.
So, when you read their comments and they make their statements, say what you have to, clearly, loudly and with the strength and honesty of those who have come before all of us. From the women at the Triangle Shirt Factory to Wesley Everest and to the current struggles for representation so many are fired for trying to obtain.
And when you do speak, know that you're not alone. We're all with you.
In Solidarity
Uniongal

It was something small. Nothing I haven’t felt or meant to say in the past. It’s just that I don’t think I’ve really thought about it. About what it really means to fight for workers, I just do it. It’s a part of who I am.

Fighting for my brothers and sisters in labor is just something I do, naturally. I have never stopped to think about it and I’m sure many of you haven’t either. I don’t care about the infighting, the dirty laundry, the poaching from one union to another union; it just doesn’t matter as long as workers can bargain, collectively.

Then I met someone who made me actually stop and think about it. I’ve thought about the why and this came about not through the Big 3 or through the constant anti-union sentiments about the UAW or IAM (from the Boeing strike) or how Andrea Mitchell and Tom Brokaw shill for the anti Employee Free Choice Act every chance they get. I started to think about it on Saturday.

You see, I went out with a new friend on Saturday. He's really an absolutely amazing person, just being near him makes me feel this unbelievable electrical jolt, you know, that feeling, when you remember why you do what you do? That jolt from the passion that is taking on the system, or fighting the good fight?

He’d shared some stuff on being a firefighter and me, well, I’ve never been much of a fan of IAFF. On a scale from one to 10 and 10 being my love for my former union (you all know I was a Teamster, right?) and 1 being my feelings toward Right Wingers, IAFF was about a 3, okay, maybe a 4.

But this guy out of the blue had me thinking about stuff. I’m not a retrospective girl. I like things to be clear, kind of orderly and since I’d made up my mind on IAFF, I really just didn’t think of them in the same way that I did IBEW, UFCW, UFW, UNITE-HERE and many others, I just didn’t.

So, he’s read my blog and he and I have had a couple of side conversations about the IAFF. He's told me about the The Secret List.
and how he's seen too many firefighters injured due to new construction issues. He’s talked about how industry standards are so low now, that during a fire, you can’t always head into a building because the materials used in new construction are so flimsy that you fall threw floors or ceilings collapse and roofs as well. Just yesterday, a Firefighter on Staten Island lost his life while battling a blaze when the roof collapsed.


But this weekend for me was different. It started out like any other weekend, busy and then, he sent me an e-mail about solidarity.

Solidarity.

IAFF is as much a brother in the struggle as the 29 year veteran of GM.

Today, I’m reminded of what it is I fight, for my brothers and sisters and there’s no rest on the horizon for any of us and yeah, I also mean you right wingers who idolize the likes of Rick Berman. Be prepared to fight, because I am.

I am now, more than ever, clear that what we need is just a little concept called solidarity.

To my brothers and sisters in Labor, Uniongal Salutes you. And yep, I mean you all in IAFF, too. You’re now a 10 in my book.

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I've been watching the hearings, hearing the testimony and pulling for the bridge loan. Then there was this tidbit, reported by Dana Milbank in the Washington Post:

So it was hard to feel sorry for the executives when Rep. Peter Roskam (R-Ill.), late in the hearing, reminded them again that "the symbolism of the private jet is difficult," and mischievously asked the witnesses whether, in another symbolic gesture, they would be willing to work for $1 a year, as Nardelli has offered to do.

"I don't have a position on that today," demurred Wagoner (2007 total compensation: $15.7 million).

"I understand the intent, but I think where we are is okay," said Mulally ($21.7 million).

"I'm asking about you," Roskam pressed.

"I think I'm okay where I am," Mulally said.

And don't even think about asking him to fly commercial.

CEO pay is a hot issue. AIG is goind out of its way to pay out for their "top managers" and then you have the big 3. The emphasis has been on the income of workers represented by the UAW (think Mitchells smarmy comments from Sunday's Meet the Press) and then there's reality:

Chrysler $29-$33:
More contract info by company here: http://uaw.org/contracts/index.php

TOYOTA
$30/hour

EXECS
Alan Mulally
Chief Executive Officer
Ford Motor Company
$22,750,385 in total 2007 compensation

G. Richard Wagoner
Chief Executive Officer
General Motors Corporation
$19,761,874 in total 2007 compensation.

Assuming a 40 hour work week, that's $9,615 an hour for Wagoner - 150% of the average CEO salary of $6,153/hour.

Chrysler isn't traded, but here's this article from the weekend about how Chrysler is paying about $30 million in retention bonuses to keep top executives while cutting thousands of jobs.

How much does the average AIG worker make? What's the median? How about the other "bailed out" organizations? Ones where they sent their IT operations off shore to India and elsewhere and canned all of their IT people like IndyMac (they weren't bailed out, just belly up)?

It's fine to get these numbers, but the issue isn't how much the average autoworker makes or the average Toyota or Honda worker, the message should be that these are American Workers who WORK. They produce American jobs, they contribute to their communities, they raise their kids, they vote and yeah, their represented by a union but they don't deserve anything less than what Wall Street has already gotten. That includes the Executives because not to do it means a destruction of local economies, not just detroit, we're talking Parma Ohio, Lordstown, St. Louis and this doesn't include the rolling effect on suppliers.

But let's take another look at AIG, again, from the Washington Post:

American International Group plans to pay out $503 million in deferred compensation to some of its top employees, saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant.

News of the payments to top AIG talent comes as the federal government has just put more money into saving the company from bankruptcy, beefing up the total public commitment to $152 billion. Meanwhile, members of Congress are questioning the company's expenditures -- including lavish business trips to resorts -- during a time when taxpayers are on the hook for the bailout.
snip

Companies over the past 20 years have increasingly use deferred compensation as a way to attract and retain highly paid executives. Under these plans, top talent can postpone taking some of their large annual salaries for years -- often until a set date -- and can put off being taxed on it. Some wait to take the funds until they retire, when they would presumably be in a lower tax bracket.

Few executives seem to understand the correlation we common Americans make with failure and excess. I for one see their salaries and wonder, WTF?

But after watching what's been going on with AIG (and the scandalous behavior AFTER their bailout-not a loan), it's just incredible that these executives from the big three flew to DC on private corporate jets. But for Mullaly and Wagoner to say no to taking a massive ONE YEAR pay cut as Nardelli has said he'd do, well, damn, I wouldn't have given them a bridge loan either, because they aren't a good risk. Of course, that's me speaking as a former home loan underwriter. If I had a homebuyer with this kind of credit, this kind of debt load while arriving in a vehicle well beyond what should be their means, I'd have to really think long and hard about those combined factors and here and now, it'd be one tough call.

What's saddest of all, it seems only Nardelli really gets what's at stake in this financial melt down, survival.

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I tend to read the stupidity of folks like Gerson because, it's important to know who stupid and inane they are, makes for nice entertainment and laughter. Well, entertainment until I read today's slop:

The coming bailout will be a major challenge for Obama. If he caves in to the auto unions that helped elect him and merely shores up a failing industry, he will start his presidency on a note of weakness. If he insists on a serious restructuring that creates sustainable companies -- including large pay and benefit cuts, and massive downsizing -- he could gain a reputation for toughness similar to Ronald Reagan's after his early firing of striking air traffic controllers in 1981.

Okay, so I highlighted what I think you should see. This is the right wing talking point of folks like Brokaw and Mitchell and here Gerson does it, too. He's blaming the union.

Unions are not monolithic creatures.

Unions do not provide the work.

Unions are not out to kill industry.

Unions ARE made up of their membership: WORKERS.

Unions ARE responsive to their membership.

The UAW IS NOT THE VILLAIN.

In the case of the auto industry, these workers have given up things that someone at Wal-Mart has never had the option to ever have and things that Gerson can't begin to think about going without; from pension cut backs to two tiered hiring to health care. They've given up a lot including cutting hours, retraining to leave the big 3 or other routes to make it easier for the big 3 to survive and not only survive, but to prosper.

Consumerism wasn't fueled by GM and certainly not by the UAW. There is a major issue right now in the financial markets and it's meant a lot of people are out of work, fuel prices caused a lot of people to cut back, me included. GM has been doing cutting edge research that they have funded in terms of fuel cells (unfortunately would mean a retooling and supply of the energy industry and we aren't there yet even if GM were able to produce the fuel cell cars now enmasse) and I'm looking forward to the Chevy Volt in 2010 even with a possible $40k price tag.

Blaming workers and their union representation for the problems caused by Wall Street is not only ridiculous, it's dangerous.

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I shit-you-not, this ACTUALLY came out this prick's mouth, as reported in the Hill...

The chairman of President Bush’s council of economic advisers said the country’s gross domestic product would have been positive had it not been for two hurricanes and a strike at Boeing.

The administration announced earlier Thursday that the GDP had dipped 0.3 percent in the third quarter, a reflection of the tough economic situation. Two consecutive quarters of negative growth are the classic definition of a recession, and experts believe the GDP could shrink again in the fourth quarter.

However, Ed Lazear, who chairs the council of economic advisers, said growth would have been positive had it not been for the strike and the hurricanes.

The Boeing strike which began in September and lasted 8 weeks coupled with 2 hurricanes CAUSED a Gross Domestic Product dip in the 3rd quarter? Boeing had only been on strike for 3.5 weeks. 3.5 weeks? I get the devestation in Galveston, okay, I'll buy that, but seriously, blaming the recession, and yes, I mean recession here on workers at a a company with BILLIONS in profits, well, I still can't freaking believe the shit that pours out the mouths of these asses.

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Labor history is significantly longer than Michael Barone understands. What has happened today is more closely related to the time of the Robber Barons popularized by the Carnegies, Rockefellers and their ilk. Decidedly anti-union, anti-worker and all capitalism all the time. Panics and economic shut downs of the late 1800's primarily caused by issues related to those same robber barons did not help the crisis that lead up to the Great Depression. And it was the Pro-Capitalist wing of the Republican Party, the hands off approach of Taft, Harding, Coolidges and Hoover that took that slow walk into financial crisis from the Post WWI period and gave us the Depression.

Barone is so hateful of Obama and the possibility of changes in our economy that he tries to link them to things in our history as if to do so would make his point. It does not, it is really only laughable at best, take this paragraph for instance:

Barack Obama and other Democrats have used the financial crisis to spin a narrative. The problem, they say, is deregulation and greed. This is not strictly speaking accurate. Obama and the Democrats opposed tighter regulation of the mortgage giants Fannie Mae and Freddie Mac, and John McCain supported it. Unregulated firms like hedge funds have done well, while heavily regulated banks have had troubles.

OFHEO (Office of Federal Housing Enterprise Oversight) is charged with GSE oversight (Fannie and freddie and Ginnie) and for the past 7 years have been pretty well sidelined by the administration from doing any kind of oversight of the GSEs.

During meetings on credit scoring, OFHEO told a group of government housing and loan policy makers that they were not able to instruct Fannie or Freddie on issues of credit underwriting or lending. At the time, several members of Congress from the Republican Party put forward talking points about eliminating OFHEO. The regulatory authority this columnist and others refer to would have been something different than OFHEO and would not have had the power OFHEO has but has also been constrained from using due to this administration.

Now, for the anti-union crap from this craptacular piece:

Their card-check bill will promote unionization and do to much of the private sector what union contracts have done to the Detroit Three automakers. Higher taxes and overregulation could reduce economic vitality and creativity. Comparable worth laws could have bureaucrats setting private sector salaries. America could move some distance to becoming another France.

First off, poor management, bad reads of the market, and GM's bailout of their lending arm (GMAC industrial bank and mortgage company) has done more to grind the "big three" into the ground than any labor agreements or disagreements.

The labor of workers is not a commodity no matter how much an economist tries to claim it is. Workers cannot and do not negotiate individual agreements with employers. Employers offer employees agreements. You can take it or not. As a worker, the only way to be treated as a market force is to band with other workers and collectively bargain with your employer. From many, one. One voice negotiates with the employer for what workers want.

okya, next piece of crap:

But some had adverse economic effects and proved unpopular: high taxes on high earners, industrial unionization.

Unionization began in the early 1800's. Trades were formed and then reformed and unions evolved over time. They didn't just appear one day during the depression. Employers caused severe problems for workers that lead to unionization from Haymarket to Triangle Shirt Factory Fire to Matewan to "baby stikers" and it took a long time until we had laws in place to restrict the manner in which employers treat employees. Again, another historical point that Barone leaves out. Unions have not caused "adverse economic effects," they have evolved as the regulations of them have as well. Personally, I'd like to see a Republican like Teddy Roosevelt back in the White House, one that supported unions and wanted to end monopolies. Unfortunately, those Republicans do not exist.


And he completed this pathetic anti-union rant with this equally pathetic statement:

But voters tend to consider only the history they know. They might do well to look back a little further.

I suppose I shouldn't be shocked that he's so eager to dismiss history that not only does Mr. Barone not understand, but clearly that he also hasn't read.

It's so simple to blame unions and Democrats for issues related to the current crisis, but it isn't Democrats who've been at the helm for the past 8 years. Republicans have controlled legislation since 1994 (except intermittent Dem control of the Senate) and have had complete control of this country from 2001 until 2006. In that time, September 11th occurred, we invaded 2 countries, Fannie and Freddie cooked their books to down play their excessive profits (2005) and then collapsed just 3 years later, etc... Seriously, did this guy even live in theis country over the past 20 years? It sure doesn't seem like he did.

The only common denominator between the Financial Crisis of today and the Great Depression is that both were brought to us by the Republican Party.

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Cash strapped communities all over the country are now feeling the pinch of the egregious Wall Street CEO behavior. Mostly, it's in the costs for their municipal bonds which have rising interest rates now cause by what is affectionately called the "credit crunch."

Credit Crunch my ass.

This is about a blatant disregard for sound financial decisions, accounting and serious lack of transparency. And now, for their sheer stupidity, these CEO's and their friends and family members in the White House want the People's Congress (yeah, that's right, you work for the PEOPLE!) to write a F*&KING BLANK CHECK to bail them out. Cause all the union members screwed by "market forces" in Michigan and the behavior of CEO's like Dick E Dauch of American Axle are getting bailouts like this, too. Oh wait, they aren't, that would be welfare. But for Wall Street, we call it a bailout. Hell no, no Wall Street Welfare.

And I'm not the only one thinking this way, take Dean Baker for instance:

According to George Bush, our financial structure is in such desperate shape that if Congress doesn't hand a $700bn blank cheque to Henry Paulson, the US Treasury secretary, immediately, the whole structure will collapse. While no one should doubt the damage that Bush's policies have done to the economy, the fact is that Congress has some time to structure a bailout that is not just another give-away to the richest people in the country.

The policies of President Bush and the recklessness of the Wall Street crew did bring the financial system to the edge of an abyss. There was a near meltdown last week as Lehman Brothers, the huge investment bank, collapsed, and AIG, the nation's largest insurer, followed suit. Banks stopped lending to each other, creating a situation in which our system of payments (eg cheques and electronic transfers) stopped functioning.

snip

Everyone should understand that we are in this mess for two reasons. First the financial regulators, both in the Bush administration and more importantly at the Fed, were completely asleep for most of the decade. As the housing bubble grew to ever more dangerous proportions, and lenders adopted increasingly questionable lending practices, the regulators did nothing.

The other reason we are in this mess is that the Wall Street banks got themselves hugely leveraged in real estate and other assets. In many cases they had no appreciation of the value of the underlying assets. They also apparently did not understand the complex financial derivatives that they had themselves created.

Now this situation has exploded in their faces, sinking several of the country's largest financial firms and bringing dozens of others near the cliff. As a result of this recklessness, the economy is now facing a recession with the unemployment rate rising rapidly. Millions of families are losing their homes.

So what is Bush proposing? He is telling Congress that everything can be put back in order if they just give $700bn to Paulson, with no strings attached.

No strings attached? WTF?

So, then Obama comes out and says what I've also been thinking (care of the Politico):

In Clearwater, FL, Obama began by talking about capping pay for executives whose companies participate in the bailout, and the prospect that that would be a deal-breaker for some CEOs.

"I cannot imagine a position that's more selfish and more greedy," Obama said, addressing executives directly.

"Do not make that mistake. You are stewards not only of your companies but also of workers and communities across this country who have put their trust in you," he said.

"This plan cannot be a welfare program for Wall Street executives," he said.

And then Ben goes on to summarize Obama:

And he raised the notion of a post-crisis "financial stability fee," a new tax on Wall Street, after it recovers, to pay back taxpayer losses.

Damn straight. You want the Wall Street Welfare, then you make serious concessions. There should be no blank check to these robber barons, especially for what they've now put our communities through in terms of municipal bonds and our freaking retirement funds!! Oh, and hell, while you're at it, let Congress know how you feel by heading over to the SEIU and signing the petition.

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Dean Baker's done it again, this time over at TPMCafe (Talking Points Memo has the stuff):

Principles to Guide the Bailout

1) Financial institutions should be forced to endure the bulk of the losses with taxpayer funds only used where absolutely necessary to sustain the orderly operation of the financial system.
2) The bailout must be designed to minimize the opportunity for gaming.
3) The bailout should be designed to minimize moral hazard.
4) In the case of delinquent mortgages that come into the government's possession, there should be an effort to work out an arrangement that allows the homeowner to remain in her house as owner. If this proves impossible, then former homeowners should be allowed to remain in their homes as renters paying the market rent. This should be done even if it leads to losses to the government.
5) There should be serious efforts to severely restrict executive compensation at any companies that directly benefit from the bailout.

Principles for Restructuring the Financial System

1) Combating asset bubbles must be one of the Fed's key responsibilities.
2) The government should impose a modest financial transactions tax, comparable to the one in the United Kingdom. This can both restrain excessive trading and raise more than $100 billion a year in revenue.
3) Regulatory agencies should require that potentially tradable assets (e.g. credit default swaps) actually be traded on exchanges.
4) There should be strict limits on leverage for all regulated financial institutions.
5) Fannie and Freddie should remain fully public institutions, returning them to a status comparable to Fannie's prior to its privatization in 1968.
6) The Fed should be restructured so that all the key decision makers (e.g. the open market committee) are appointed by democratically elected officials. Its responsibility is to manage the economy in the interest of the general public, not the financial sector.

Given the urgency for passing a bill, Congress should look to enshrine principles in a bailout bill that will allow subsequent legislation to circumvent ordinary procedural issues (e.g. the filibuster in the Senate).

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I read his American Prospect column and blog and find it really easy to read and understand. He just knows how to connect the dots, especially with this latest piece:

September 21, 2008
Senator Shelby Doesn't Understand the Bailout

That would have been an appropriate headline for a Washington Post article on the bank bailout. The article reported Senator Shelby's objections to including any provisions in the bailout that would restrict executive compensation. According to the article, Shelby said that he thinks that compensation should be set by corporate boards.

Of course nothing proposed in the bailout would prevent corporate boards from setting whatever compensation levels they want. However, if the corporation wants to take advantage of the government's largess than it would be required to meet rules on executive compensation.

This sort of restriction on those getting special privileges from the government is common. For example, churches that enjoy tax exempt status are restricted in their ability to lobby Congress and take part in other political activities. No one questions the right of any individual or group of individuals to lobby Congress. However, those that directly benefit from special tax treatment, do face restrictions. Similarly, corporations can pay their CEOs whatever they want. However, if they want a share of the government's bailout, they may face restrictions if the Democrats get their way.

--Dean Baker

So, I just had to go to the Post article and found that Shelby really does have his head up his ass:

Many lawmakers also want additional protections for taxpayers. House Republicans, for example, have asked that any profits generated by the sale of the bad assets be used to reduce the budget deficit and not for any other purpose.

Where the parties appear to diverge is over Democrats' demand for government authority over the paychecks of executives whose companies participate in a taxpayer bailout. House Republicans oppose the idea, aides said, and Sen. Richard C. Shelby (R-Ala.), a key figure in the debate, said yesterday on CBS's "Face the Nation" that he thinks compensation should be set by corporate boards.

Speaking on the same program, Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said voters would protest a program that appears to permit corporate executives to pocket taxpayer dollars.

"It would be a grave mistake to say that we're going to buy up the bad debt that results from the bad decisions of these people, and then allow them to get millions of dollars on the way out the door," Frank said. "The American people don't want that to happen, and it shouldn't happen."

The idea does have a recent precedent: When regulators took over mortgage financiers Fannie Mae and Freddie Mac this month, they not only removed the firms' top executives but also eliminated $12.59 million in "golden parachutes" that had been promised in severance pay and bonuses. The executives, Daniel H. Mudd of Fannie Mae and Richard F. Syron of Freddie Mac, will now get a combined $9.43 million upon their exit.

Speaking on "Fox News Sunday," Paulson acknowledged "excesses" in executive compensation but said the debate should be put off for another time.

"If we design it so it's punitive and so institutions aren't going to participate, this won't work the way we need it to work," Paulson said.

Paulson expressed more openness to the idea of foreclosure relief for homeowners whose loans are being financed by the securities the government would buy. "I think there should be a mortgage relief component to this," he said, without elaborating.

For nearly a year, Paulson has touted an initiative that calls on banks to voluntarily modify mortgages held by struggling homeowners so they can stay in their homes. Paulson said in a recent interview that this effort, called Hope Now, has helped 1.7 million households. But Democrats are skeptical, noting that the data are vague about the extent of assistance provided.

Paulson again warned lawmakers to resist adding too many provisions to the bill.

"We want this to be clean, and we want this to be quick, and it's urgent that we get this done," he said.

But so does Secretary Paulson. Which is probably about the time I also noticed that Mr. Baker also took Paulson to task for, well, being Paulson:

« Conditions for a Bailout | Main | Senator Shelby Doesn't Understand the Bailout »
Paulson Missed the Bubble and Understated the Financial Crisis at Every Point

Treasury Secretary Henry Paulson is telling Congress that if it doesn't give him a $700 billion blank check the financial system is going to collapse. It would be reasonable for reporters discussing this request to present some background on the track record of the person asking for this enormous blank check.

In March of 2007, after the first shock waves of the housing meltdown had already hit, the Associated Press reported Mr. Paulson's view that the credit difficulties linked to the housing slump would be limited.

In August of last year, after the second round of financial shock waves disrupted markets worldwide, Paulson commented, "We have the strongest global economy I’ve seen in my business lifetime."

Just last March he warmly endorsed a reduction in the capital requirements for Fannie Mae and Freddie Mac, saying "additional capital [invested in mortgages by Fannie and Freddie] will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market."

At every point along the way, Secretary Paulson has failed to see the extent of the crisis resulting from the collapse of the housing bubble. This raises serious questions about his judgment. Reporters should be discussing Paulson't track record in the context of this bailout proposal.

--Dean Baker

But the really good stuff is the graphic in the sidebar of the New York Times piece on Paulson and Bernake. It pin points this Secretary's complete disregard for anything that isn't McCain-esq economy is strong crap. You've really got to check it out.

Hey, Mr. Baker, thank you for saying what's been bumbling about in my head for the last few days. It's like you were reading my mind, only with a translator attached!!

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